The problem as far as these analysts were (are) concerned is that the raft of government guarantees being bandied about the world are generally meaningless.
They pointed out - and worryingly there was no dispute, they agreed unanimously - that the potential depth of banking problems in some countries was such that previous safe havens are seen as no such thing anymore. Switzerland was highlighted in the conversation, although they stressed it was not the only problem nation.
The analysts, who do not wish to be identified, argued that if Switzerland had to bail out its banks the cost would be in excess of 40 times the country's GDP - in other words impossible. Now I argued back that such emergencies are the very reason why the IMF exists and they agreed, but equally they shot back that they had no interest in holding depreciating Swiss assets while the IMF debated back and forth before (probably) helping with the bail out.
I have highlighted this issue for two reasons. Firstly, I am in a very bad mood after my laptop was stolen last week so I want to be grumpy about something. And secondly, in a week when investors and currency traders rushed for "safe havens" the Swiss franc (traditionally the safest of safe havens) went down. I can't remember the Swissy ever suffering during a flight to safety so all of a sudden I am a little nervous... .
Sumber : anonymous
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